News

NSW budget lacks the boost businesses were hoping for

- June 18, 2024 4 MIN READ

 

 

The NSW Government has unveiled its 2024-25 Budget. At the centrepiece of its business support package is the expansion of the Service NSW Business Bureau. However, the lack of substantial assistance to counter the rising cost of doing business has left business advocates scratching their heads.

To further the reach of the Service NSW Business Bureau initiative, the Minns government has pledged an additional $5 million, bringing its total investment to $30 million for the year. The Service NSW Business Bureau is dedicated to assisting small businesses navigate regulations, access growth support, secure government contracts, and explore overseas markets. Since its inception, the Bureau has serviced over 100,000 businesses and provided more than 20,000 hours of free, tailored advice on critical business topics such as planning, marketing, and cash flow.

NSW Treasurer Daniel Mookhey suggested the investment cemented the Government’s commitment to supporting small businesses.

“In this Labor budget, we continue our plans to bust the wages cap, reform tolls, back first-home buyers, build new and better public schools and hospitals, speed up the renewables revolution, rebuild rural and regional roads, help small businesses, and wrangle debt back under control, Mookhey said.


Key initiatives for small businesses

Service NSW Business Bureau Expansion:

Funding Increase: An additional $5 million for 2024-25.

Services Offered: Regulatory navigation, growth support, government contract access, overseas market exploration, and red tape reduction.

Impact: Over 100,000 businesses serviced, 20,000+ hours of advice delivered.


Payroll Tax Relief for GP Clinics:

Bulk-Billing Support Initiative: $188.8 million initiative to waive historical payroll tax liabilities for contractor GPs and provide ongoing tax rebates to clinics meeting bulk-billing thresholds.

This measure aims to reduce financial pressure on GP practices, ultimately benefiting small healthcare businesses.

Digital Future Investments:

Cyber Security and ID Support: $205 million to enhance cyber resilience.

Digital Licensing: $62.5 million to streamline 80 NSW qualifications.

Digital ID and Wallet: $21.4 million for easier and more secure identity verification.

Housing and Construction Support:

Housing Pattern Book and Design Competition: $11.4 million to standardize building designs and streamline planning approvals, creating more opportunities for small businesses in the construction industry.

NSW Building Commission Funding: $35 million to assure quality builds, benefiting construction-related small businesses.

Supporting Community and Night-Time Economy:

Night-Time Economy: $54.2 million to revitalize the night-time economy and creative industries, including $26.9 million for the Office of the 24-Hour Economy Commissioner and $18.5 million for Sound NSW. These funds will support small businesses in hospitality, arts, and entertainment.

The budget also outlines significant investments in social housing, healthcare, education, and community services, all aimed at building a stronger and more resilient NSW.

Treasurer Mookhey highlighted the broader vision, stating, “Careful management of the public’s finances means we can afford to accelerate change. We can do more to prevent family and domestic violence. And we can do more to support victim-survivors. We can do more to help people visit their GP. And we can surge more resources into our emergency departments.”

Reactions from small business advocates

Ben Thompson, CEO and Co-Founder of Employment Hero, shared mixed feelings about the budget suggesting more could have been done to assist struggling business owners impacted by inflation and the cost of doing business.

“While some sectors have received targeted assistance, the broad consensus is that more could have been done, especially in terms of support for struggling SMEs,” Thompson said.

“With nearly 850,000 registered small businesses in NSW, they form the backbone of the economy, and their ability to hire, retain, and grow their teams is essential for economic recovery.”

Gavan Ord, CPA Australia spokesperson, highlighted the disappointment among business advocates regarding the limited measures to ease business pressures.

“It’s disappointing that this year’s budget did not include any significant measures to alleviate business costs and ease the regulatory burdens on businesses. While the budget had a strong focus on balancing the books, everyone in New South Wales stands to benefit from a budget where business was more at its centre.”

Although, Ord praised the government’s plan to consult on a performance and wellbeing framework,

“One positive is the government’s move to consult on a performance and wellbeing framework. Such a framework could help improve the measurement of the impact of policy decisions. If implemented effectively, this initiative could lead to policies that better contribute to a healthier business environment.”

Luke Fossett General Manager of GoCardless added the budget did little to address major areas of small business concern, particularly regarding cash flow issues and late payments.

“While there are plenty of great measures in the new NSW budget, it’s largely overlooked the struggles of NSW SMBs that are battling a ‘cost of doing business crisis’, made worse by the increasing risk of late payments to businesses. The budget lacks substantive measures to alleviate mounting cash flow and expense pressures for SMBs, and there’s nothing in there to incentivise customers to support their local businesses.

Our recent research indicates a worrying trend – over 40% of NSW SMB owners feel uncomfortable talking to customers about money, and a similar percentage feel uncomfortable chasing late payments. This is not just about awkward conversations; it’s affecting their bottom line, with business leaders losing an average of $1544 a month from late payments.

Over half of NSW business owners are concerned the number of customers who pay late will increase in the next 12 months. The alarming trends of late and failed payments have a significant, often overlooked, impact on cash flow, further exacerbating the financial hardships many SMBs face. Despite these issues, there seems to be a total absence of support measures in the budget to help SMBs be resilient,” he concluded.


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